Nikkei slips ahead of long weekend, railways hit by virus

By Hideyuki Sano
TOKYO, July 22 (Reuters) - Japanese shares dipped on
Wednesday as investors locked in recent gains ahead of a long
weekend, with a rise in domestic coronavirus cases weighing on
major railway operators.
The Nikkei share average .N225 fell 0.58% to 22,751.61
ahead of a four-day weekend, which was supposed to coincide with
the start of the Tokyo Olympics. The broader Topix .TOPX lost
0.62% to 1,572.96.
"The technology sector, which was starting to boom even
before the pandemic, remains the rising star of the market
because of all the social changes due to the virus," said
Hiroshi Watanabe, senior economist at Sony Financial Holdings.
"On the other hand, various in-person services were buried."
Railway shares continued to perform poorly as domestic virus
cases continued to rise, reflecting lack of investors'
confidence in the government's campaign to promote domestic
tourism that started on Wednesday.
East Japan Railway 9020.T fell 2.9% to a seven-year low,
while West Japan Railway 9022.T lost 1.7% to a trough last
seen in 2014.
Drugmakers, among the best performers in the early stages of
the pandemic, also dropped as investors rotated out of
defensives to cyclicals.
Drugmakers .IPHAM.T dropped 1.5%, with Daiichi Sankyo
4568.T losing 4.6%.
On the other hand, Nidec 6594.T jumped 4.8% after the
manufacturer of electronic motors posted strong earnings, with
its quarterly operating profit rising slightly from a year
earlier, beating analyst forecasts of sharp falls. Fujitsu General 6755.T climbed 3.8% to a three-year high
as the firm raised its earnings guidance, due to solid sales of
air-conditioning machines.
Shares of some other electronic parts makers gained, with
Shin-etsu Chemical 4063.T up 2.1% and Murata Manufacturing
6981.T rising 1.1%.
Decliners outnumbered gainers by a ratio of 78 to 22.
Still, the losses were kept in check as investors bet
Washington will deliver a new round of stimulus and after the
European Union agreed on an economic recovery fund.